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Overseas Territories and the EU

The OCT Decision sets out the framework for the EU's co-operation with the Overseas Countries and Territories (OCTs) of the Member States. Eleven of the UK's Overseas Territories are included in the Decision: Anguilla, British Antarctic Territory, British Indian Ocean Territory, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Montserrat, Pitcairn, St. Helena and Dependencies, South Georgia and the Sandwich Islands, and Turks and Caicos Islands. Bermuda is not included at its own request.

The framework, set out in The OCT Decision of 1991, conforms to the EU’s aspirations of a new, more just and balanced international economic order. The aim of The OCT Decision is to promote and accelerate economic, cultural and social development and to strengthen the economic structures of the OCT. The Decision states:

‘The EU shall provide support for the OCT's efforts to achieve comprehensive development based on their cultural and social values, their human capacities, their natural resources and their economic potential in order to promote the OCT's social, cultural and economic progress and the well-being of their populations through the satisfaction of their basic needs, the recognition of the role of women and the enhancement of people's capacities, with respect for their dignity. Such development shall be based on a sustainable balance between economic objectives, the rational management of the environment and the enhancement of natural and human resources.’

The Decision’s framework for cooperation gives special importance and high priority to regional cooperation and integration. The EU acknowledges the need to accord special treatment to the least-developed OCTs and to take account of the specific difficulties confronting them.1

The new OCT Decision came into effect on 1st December 2001, and comes after a year of hard negotiation. The new Decision represents a good deal for the UK OCTs. It maintains the advantages of the previous Decision on trade and aid and gives some welcome improvements, particularly on the development side. Most importantly, because EU development policy now focuses funds on the least developed countries, the UK OCTs will get a bigger proportion of the available development money, up from 18% (around 20 million euro) last time to over 30% (around 40 million euro of the total 127 million euro allocated to the OCTs) this time.

The process of disbursing development funds, has been streamlined. The Commission will support, but no longer directly manage, projects – thus giving more devolved responsibility to the OCTs themselves. This is widely recognised as developmental best practice. The OCTs will also have access to other EU budget lines open to developing countries (e.g. for the environment, for NGOs and for humanitarian aid). Furthermore, other community programmes will be opened to the territories (e.g. training and educational programmes).

The principle of transhipment remains (the transhipment provision allows 3rd country goods to enter the EU duty-free if they arrive via an OCT which has already charged duty at a rate equivalent to the Community rate), and contains some clarifications which should make transhipment more stable and more workable from the position of the OCTs. Overall the new Decision represents an improvement over the previous Decision and is a good deal for UK OCTs.

Notes for Editors

1. From ‘EEC: Council Decision of 25 July 1991 on the association of the overseas countries and territories with the European Economic Community’.

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